POSCO is facing unprecedented uncertainty as tensions escalate between labor and management over the company's plan to directly employ workers from its partner companies. The labor union has initiated dispute procedures, claiming the move was made unilaterally without prior consultation. There are even discussions about the possibility of a first-ever general strike in the company's history.
In April, POSCO announced its decision to directly hire 7,000 employees from partner companies through the Pohang and Gwangyang steelworks' cooperative council, citing the establishment of a 'coexistence labor-management model.' The company also revealed specific hiring methods, conditions, and treatment systems. A new job category, 'Operational Synergy (S) Group,' was created, with a promotion system ranging from S1 to S7.
Direct employment of partner company workers is not unprecedented in the steel industry. In 2021, Hyundai Steel became the first private company in South Korea to hire over 4,500 employees from in-house partner companies as regular staff, followed by Dongkuk Steel, which directly employed 889 subcontracted workers in 2024.
However, POSCO's case stands out due to its scale and potential impact. The direct employment plan affects about 40% of POSCO's workforce of approximately 17,000 employees, including those at its steelworks, which could influence the existing regular employment system and overall organizational operations.
The main issue lies in the lack of sufficient dialogue with the workforce during the implementation of such a significant change. The union is particularly concerned about the absence of consultation during the process rather than the direct employment itself. Existing employees have also expressed concerns about potential changes to job structures, personnel management, and wage systems.
Kim Sung-ho, chairman of the POSCO labor union, stated in a press release at the time of the announcement, "The management ignored the minimum procedure of building consensus among employees, causing deep wounds among union members. The intense efforts and unique values of each employee in the hiring process must not be undermined."
Employees of partner companies targeted for direct employment have also voiced their dissatisfaction. They are raising concerns about being segregated into a separate S group, distinct from the existing regular production E group, which they see as discriminatory. Some employees from certain partner companies at the Pohang and Gwangyang steelworks have already refused to report to work due to grievances over the wage system, disrupting operations. Those affected include employees from companies like POTL and PSC, who are being considered for the S group transition. POSCO has reportedly deployed direct workers to replace them on-site.
Currently, the wage system for the S group is set at over 70% of the equivalent E group for the same years of service, with the same benefits as direct employees.
The company's challenges are understandable. Recently, there has been increasing demand in the industry for stronger accountability from primary contractors and improvements in safety systems. The issue of 'outsourcing risk' in manufacturing has become an urgent matter that cannot be postponed. It appears that POSCO has made a significant decision for large-scale direct employment in response to these societal trends. However, having the right direction does not guarantee that the process will be accepted by all.
In industries like steel, where workplace culture is strong and job structures have been maintained for a long time, the process of persuading members is crucial. Concerns have been raised that if this conflict continues for an extended period, it could affect not only labor-management relations but also the stability of production sites.
POSCO has consistently emphasized 'coexistence' as a core corporate value. The company must consider the mutual growth with its partners and the enhancement of safety as essential tasks. However, true coexistence cannot be achieved through declarations alone. Equally important is how well the members can understand and accept these policies. What POSCO needs now is not rapid decision-making but sufficient communication to restore trust among its workforce.
* This article has been translated by AI.
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